3701-28-18
Registration and bonding of water systems contractors.

(A)
As a condition
of doing business in this state, private water systems contractors shall
annually register with the department and comply with the surety bonding
requirements of section
3701.344 of the Revised Code and
the requirements of this rule.

(1)
Only registered contractors may construct, alter, or
seal private water systems, drill water wells, and install pitless
adapters.

(2)
With the exception of paragraph (A)(1) of this rule,
registration is not required of any person who performs labor or services as an
employee under the direct supervision of a registered contractor, any private
water system owner who performs work on the private water system serving his
dwelling house, or any person who aids the owner with this work without
compensation. Owners of a primary or secondary property, or property rentals in
which they do not reside, or owners, altering or sealing water wells for their
dwelling house shall obtain a registration to perform work, but are exempt from
the bonding requirements established in paragraph (B) of this rule, and may
only perform work on residences they own. Persons exempt from registration
under this paragraph shall comply with all applicable rules of this
chapter.

(3)
For purposes of this rule "direct supervision" means
that a registered water system contractor instructs and controls the person
claimed to be supervised, the person is an employee of the registered
contractor, and that the registered water system contractor is responsible for
the actions of that person and is reasonably available if and when needed, even
though such registered water systems contractor may not be physically present
at the work site.

(4)
Any person who is performing work on a private water
system that is not subject to paragraph (A)(1) or (A)(2) of this rule, shall
immediately cease work on the private water systems at the order of the board
of health or the department of health.

(5)
Subcontractors
who perform work under contract for a registered private water systems
contractor for electrical, welding or excavation work for trenching are not
required to obtain a registration as a private water systems
contractor.

(1)
Application for
annual registration as a private water systems contractor shall be made to the
director on forms prescribed and provided by the department of health. The
application shall include:

(a)
A two hundred and fifty dollar registration fee made
payable only by check or money order to "Treasurer, State of Ohio"; or a five
hundred dollar registration fee made payable only by check or money order to
"Treasurer, State of Ohio" for registrations submitted after a private water
system has been constructed without a valid registration;

(b)
An annual
registration bond, complying with paragraph (D) of this rule, executed by the
applicant as principal, and a surety company authorized to do business in the
state as surety, in the sum of ten thousand dollars available for each calendar
year coinciding with the applicant's registration. Applicants for a private
water systems registration that have not previously held a valid registration,
or applicants whose registration has been suspended, shall submit a
registration bond in the sum of twenty thousand dollars for a period of three
registration years. Applicants with a valid bond claim in the prior
registration year shall also submit a registration bond for twenty thousand
dollars for a period of three registration years. Upon the third registration
year with no valid bond claim, new or previously suspended applicants, or
applicants with prior valid bond claims, may submit a bond for ten thousand
dollars the following registration year;

(c)
The surety bond
shall run to the state as obligee and shall be for the benefit of any aggrieved
party for damages incurred as a result of a violation of this chapter. The bond
shall provide that the aggregate liability of the surety for any and all
breaches of the conditions of the bond shall in no event exceed the penal sum
of the bond for the year of registration;

(d)
Proof of not
less than five hundred thousand dollars of general business liability
insurance;

(e)
Proof of a construction inspection by the department
of health, a person designated by the director to conduct contractor
inspections, or board of health as authorized in paragraph (F) of rule
3701-28-04 of the Administrative
Code within a five year period;

(2)
An applicant
which is a partnership, corporation or other business association, shall
designate one partner, officer, or director who shall be the company's
representative to register on the company's behalf, and who shall be
responsible to ensure compliance with this chapter.

(1)
Private water systems contractors shall submit an
application for renewal of the private water systems contractor registration
along with the fees and information required under paragraph (B) of this rule
by December thirty-first of each calendar year. Upon receipt of an application
form for registration and the information and fees required under paragraph (B)
of this rule, the director shall conduct a review to determine if the
information is accurate, complete, and that the private water systems
contractor has no unresolved bond claims or outstanding violations of this
chapter.

(a)
Upon determination that the application and information is accurate and
complete, the director shall furnish the registrant with a valid and current
registration card containing the name of the registrant, the registrant's
representative, if applicable, the registration number, and the expiration
date;

(b)
Upon determination that the application and
information is incomplete, the director shall notify the applicant of the
information that is required and not issue a registration until all required
materials are received by the department; or

(c)
Upon
determination that the applicant has unresolved bond claims or outstanding
violations of this chapter, the director shall deny the private water systems
contractor registration.

(d)
The private water systems registration becomes valid
upon issuance by the director.

(2)
In the case of
those applicants subject to paragraph (B)(2) of this rule, the partnership,
corporation, or other business association and not the representative
designated in accordance with paragraph (B)(2) of this rule shall be the
registrant. When the representative is no longer associated with the
registrant, the registrant shall so inform the department of health in writing
within thirty days and give the name of another representative in accordance
with paragraph (B)(2) of this rule.

(3)
The initial and
renewal registration shall not be transferable and expires annually on December
thirty-first, unless earlier revoked. A registration may be renewed for an
ensuing year by making application to the director in accordance with paragraph
(B) of this rule. If a renewal application has been received on or prior to
December thirty-first, such application shall extend the period of validity of
the current registration until a new complete registration is issued or the
director denies a new registration under the provisions of division (B)(3) of
section 3701.344 of the Revised Code,
this chapter, and Chapter 119. of the Revised Code.

(1)
Registration bonds shall be executed in the name of the applicant, as
principal, on a bond agreement form provided by the department of health and
shall include a certificate from the superintendent of insurance demonstrating
that the surety company is authorized to operate a surety business in this
state.

(2)
If the registration bond supporting the registration
is canceled, the registrant shall submit within ten days to the department of
health a new registration bond, in accordance with the requirements of this
rule. The surety company shall give ninety days written notice to the
department of health prior to the effective date of
cancellation.

(3)
No private water systems contractor shall perform work
on a private water system without a valid registration bond. In the event that
the registration bond is cancelled, the private water systems contractor shall
not perform work on a private water system until a valid replacement bond has
been provided to the department of health.

(4)
As a condition
precedent to making a claim on a registration bond:

(a)
Any aggrieved
party who alleges that violations of this chapter exist for a private water
system, shall contact the private water systems contractor who performed the
work on the private water system and the board of health having jurisdiction in
the health district where the private water system is located regarding the
nature of the alleged violation. The board of health having jurisdiction shall
investigate the complaint and determine if a violation of this chapter has
occurred. The board of health shall consult with the aggrieved party and the
private water systems contractor on the corrective actions necessary to resolve
the violation. After consultation with the board of health and the private
water systems contractor on the plan for correction of the violation, the
aggrieved party shall provide the private water systems contractor an
opportunity to correct the alleged violation, unless otherwise authorized by
the director. For purposes of this rule "aggrieved party" means the property
owner or the agent of the property owner who contracts for a private water
system with a water systems contractor and whose system is not installed,
altered, repaired or abandoned in substantial compliance with the provisions of
this chapter. The rights of the aggrieved party to the bond shall be forfeited
if the aggrieved party denies the water systems contractor access to the
private water system to perform actions necessary to correct the violation or
violations.

(b)
If a violation identified by an aggrieved party and
the board of health is not corrected by the private water systems contractor,
the person who alleges to be an aggrieved party shall give written notification
to the director and to the board of health having jurisdiction in the health
district where the private water system is located. The written notification
shall state the violation of Chapter 3701-28 of the Administrative Code upon
which the person desires to base a claim. The director shall send a copy of the
complaint to the water systems contractor and the board of
health.

(c)
The director, with the assistance of the board of
health, shall investigate the validity of the allegation, and may consult with
the aggrieved party, board of health, and the private water systems contractor.
The director may hold an informal meeting with the aggrieved party, the private
water systems contractor, other technical experts, or board of health at the
request of any of the parties involved to work towards resolution and
correction of the violation.

(d)
If the director
concludes that no rule violation exists, he shall so notify the alleged
aggrieved party, the board of health, and the registered contractor in writing.
The director, if satisfied of the existence of a rule violation, shall notify
in writing the aggrieved party and board of health, of the rule violation and
issue a notice of violation to the water systems contractor and the surety
company that sets forth the following:

(e)
If a water systems contractor fails to comply with the
notice of violation issued pursuant to paragraph (D)(4)(d) of this rule within
sixty days, the director shall notify the surety company, the aggrieved party,
the board of health, and the water systems contractor and shall:

(ii)
Inform the surety of its options in responding to the
notice, as set forth in paragraph (D)(4)(d) of this rule.

(f)
Within thirty days from the date the surety company receives a notice under
paragraph (D)(4)(d) of this rule the surety company shall notify the director
that it will perform one of the following:

(i)
Not correct the
violation or violations resulting in the issuance of the order and shall make
payment for the full amount of the bond to the aggrieved party;

(ii)
Correct the
violation or violations, or pay the cost of correction within thirty days of
receiving the notice and submit to the director a plan for performance of the
work necessary to correct the violation or violations; or

(iii)
Make payment
to the aggrieved party in an amount equal to the purchase price of the private
water system and any other activity necessary to bring the private water system
into compliance with this chapter, including the sealing of a private water
system, if necessary.

(g)
The rights of
the surety company to correct the violation or violations resulting in a notice
issued under paragraph (F)(4)(f) of this rule shall be terminated and the
director shall order the entire amount of the bond forfeited if the surety
company fails to:

(i)
Notify the director within thirty days of receipt of
the notice that it will or will not correct the violation or
violations;

(ii)
Submit a plan for completing the required work at the
same time it notifies the director that it will perform or pay the cost of
performing the required work; or

(iii)
Commence,
continue, or complete the required work in a manner and in accordance with this
rule and the provisions of this chapter.

(5)
The notification
required in paragraph (D)(4)(a) of this rule must be made within two years from
the date the work on the private water system, or the component thereof, is
completed. The rights of the aggrieved party to the bond shall be forfeited if
the aggrieved party denies the bond company or its agents access to the private
water system to perform actions necessary to correct the violation or
violations. The bond claim shall be withdrawn due to lack of response within
sixty days from the aggrieved party after notification from the department, the
private water systems contractor or the surety on the proposed corrections of
the violation or violations.

(6)
The surety
company shall give written notice to the director within thirty days of payment
on a claim against a registration bond. The notice shall specify the name of
the registered contractor, the name of the aggrieved party, the amount of the
claim, and the date and manner in which the claim was paid.

(E)
The
director shall publish annually a list of names and addresses of all persons
holding registrations under this chapter and upon written request shall provide
a copy of the list to any person.

(F)
Every registrant
shall maintain and submit to the board of health, the department of health
and/or the director such complete and accurate records as may be required for
determining compliance with all applicable rules of this
chapter.

(g)
Conviction in any criminal proceeding or failure to
comply with a judgment or order that is issued by the court in any civil
proceeding in connection with a private water system;

(h)
Aiding or
abetting an unregistered person to evade the requirements of division (B)(3) of
section 3701.344 of the Revised Code and
this rule, allowing one's registration to be used by an unregistered person, or
acting as an agent, partner or associate of an unregistered person with the
intent to evade the provisions of this chapter;

(i)
A demonstrated
incompetency to act in the business or businesses for which a registration is
held; or

(j)
Having more than one bond claim within a three year
period where the director determined that there were violations of this chapter
and that damages did occur.

(3)
The private
water systems advisory council created by section
3701.346 of the Revised Code
shall meet at the behest of the director to advise the director on the
suspension, revocation, or denial of a private water systems contractor's
registration.

(4)
Procedures for the revocation, suspension, or denial
of a registration by the director shall be in accordance with Chapter 119. of
the Revised Code. Pursuant to that chapter, the private water systems
contractor is entitled to a hearing upon request made within thirty days of the
mailing of notice of the action on the registration. The date set for the
hearing shall be within fifteen days, but not earlier than seven days, after
the private water systems contractor has requested a hearing, unless otherwise
agreed to by both the agency and the contractor.